Large will mind the gap

JUST as the opposition parties were working themselves up into a lather over the Bank of England deputy governor vacancy, Gordon Brown slips back into town and hands the job to Sir Andrew Large.

Among the reasons for the delay in finding a replacement for David Clementi was Brown's care in talking it over with governor Sir Eddie George at the Treasury before signing off on the appointment.

Some of the City's bigger egos might worry about being a number two or, more correctly, a joint number two.

Not Large. Having held down the deputy chairman's job at Barclays through five turbulent years, when his hopes of stepping up to the top job were quietly snaffled by chairman Sir Peter Middleton, he may seem to be settling for second best again.

But it is not quite like that, since the post that Large fills is effectively that of the Bank's chief operating officer, with authority over all aspects of its work, from budgets to banknote printing.

Certainly, no one can dispute Large's qualifications for a job that will put him in charge of the Bank's financial stability arm and give him a vote on the Monetary Policy Committee.

In many ways, Large was instrumental in setting in motion the events that resulted in the creation of the super City regulator, the Financial Services Authority (FSA), soon after Labour came to office.

As boss of the Securities and Investments Board (the FSA predecessor) Large was responsible for creating the biggest regulatory exercise in British history - the £9bn compensation scheme for the mis-selling of pensions. His frustration over the SIB's lack of powers to deal with market abuse paved the way for a stronger, legislative regime several years later.

Although a seemingly permanent number two, Large could not be accused of being unwilling to assert himself. He was a prime mover against former Barclays chief executive Martin Taylor when he made such a hash of running and then selling BZW. Indeed, Large's over-zealous involvement led to him stepping down from his executive role.

All this is so much history. Large will now have the task of raising the profile of the bank's financial stability wing. Given the current uncertainty in financial markets, and the bursting of stock market and property bubbles, there should be no shortage of tasks.

To read himself into the job, I suggest Large, a Cambridge economist, takes the time to re-read Professor Charles Kindleberger on Panics, Manias and Crashes.

The guru's advice to central bankers is, if in doubt, ease credit. What a shame Sir Andrew is otherwise engaged, and won't be voting on the MPC this week.

Dobson's choiceONE of the secrets of running a successful and profitable family business is recognising the limits of personal ability, and appointing the right people to do the job.

Over the decades the Schroder family has been remarkably good at this, with Lord (Gordon) Richardson, James Wolfensohn and Sir Win Bischoff among the distinguished executives who have guided the group and kept it functioning as an independent force in British finance.

After the sale of the investment bank to Citigroup, the core of the family holding is now in the rump fund management arm Schroders - which is the largest independently quoted asset manager in Britain. But in recent years its performance has been distinctly low-octane. It is currently being hampered by the grimmest bear market since the 1930s.

Given this difficult background, the first-half results from Schroders, under the new leadership of chief executive Michael Dobson, must be regarded as creditable if not impressive. Last year's losses, partly caused by some accounting revisions, have been put behind it and the group earned £25.9m before tax.

As critically for a fund management group, it still has £102bn under management, down from £110.4bn at the end of last year. This was enough to keep the analysts upbeat, and there is also some comfort being drawn from the Schroders balance sheet - while other groups in the financial sector are not faring so well.

Slowly, but surely, Dobson is making a difference. He could potentially find himself in the top job when Peter Sedgwick, a veteran of the Equitable Life debacle, steps down at year end.

House price signalTHE house price indices are notoriously fickle. Nevertheless, over the decades the Halifax has been consistently correct in calling the top of the market. So the disclosure that price rises fell back sharply in August by 0.2% may well be the first serious evidence that air is coming out of the residential bubble.